Impact of Iraq protests on the oil sector of Iraq

Iraq experienced a political crisis between the October 2021 and October 2022 legislative elections, during which the Council of Representatives of Iraq was unable to create a stable coalition government or choose a new president. Basic government (military and civil service) (Wikipedia, 2022)functions remained, but the national political system was impassed on nearly all significant expenditure and taxing problems.


The Iraq protests find their roots in the 2021 elections and the attempted assassination of then Prime Minister Mustafa Al-Kadhimi. With the attempted assassination came the call by Muqtada al-Sadr to form a majority government on November 18, 2021. In January 2022 the newly elected parliament first convened in the Green Zone to choose a speaker and two deputy speakers. In addition to Hakim al-Zamili of the Sadrist Movement and Shakhawan Abdulla of the Kurdistan Democratic Party, the current speaker of the parliament, Mohamed al-Halbousi, was elected to a second term. Because the candidates from each bloc voted for one another, the Kurdistan Democratic Party, Sadrist Movement, and Progress Party were able to occupy those three places. The Shiite Pro-Iran factions in parliament (Wikipedia, 2022)as a result disregarded the results and boasted that they had 88 seats, which was more than the Sadrist Movement. The Iraqi Supreme Court then reviewed the situation, and the parliament was then momentarily suspended before being able to continue again. The Iraqi Constitution mandates that the president be chosen 30 days following the election of the speaker of the parliament. The Patriotic Union of Kurdistan nominated incumbent Barham Salih to compete for a second term, while the Kurdistan Democratic Party chose former foreign minister Hoshyar Zebari to run for the position as the party’s second (Wikipedia, 2022) candidate submitted to the necessary parliamentary vote.

On 13 June 2022 the 73 members from al- Sadr’s side resigned but on June 23 2022 they were reinstated and as a result the Coordination Framework bloc (Wikipedia, 2022) which is a set of parties which are backed by Iran with Nouri al-Maliki as its head grew to have 130 seats. With the July 17 leak of Nouri al-Maliki’s conversation where he was caught criticizing al-Sadr further made the matters worse. With the election of Mohammed Shia’ Al Sudani as prime minister of the country the people of Iraq especially those who supported al-Sadr lost their cool and on July 27, 2022, they stormed the Green Zone and the Iraqi parliament (WikipediA, n.d.) with many campaigns inside the parliament. With the message by al-Sadr saying “pray and go home” many returned back home and this led to Muqtada al-Sadr calling for early elections on August 3.

But on August 29, 2022 Sadr made his political resignation known via a tweet. At least 15 protestors were killed later that day when his followers attacked the presidential palace and armed battles broke out inside the Green Zone. A national curfew was announced by the Iraqi Army. Additionally, protests and fighting broke out in southern Iraq’s Basra and Maysan Governorate. On August 30, rioting broke out in Basra and expanded to Karbala as protesters attacked the Karbala office of the Iraqi parliament and blocked the entrance to the Umm Qasr port.

Situational update

On or around September 5, the second round of negotiations came to an end, necessitating further discussions in order to reach an agreement on a candidate for the crucial head of state and ratifying position of president, as well as a working coalition and a confidence and supply agreement between the parties on important issues, or to the new elections the Prime Minister is still pushing for. 

After more discussions amongst the major groups, the Iraqi Parliament reconvened on October 13 and chose Abdul Latif Rashid to lead the nation. He defeated incumbent Barham Salih by 230 votes in the parliament to win. After this election, Rashid gave Mohammed Shia’ Al Sudani the job of creating the government and appointing him prime minister, which signaled the beginning of the end of the impasse. Despite invitations from a number of people, Sadr declared he would not join the new al-Sudani cabinet.

Police has also had to open fire in Basra in order to disperse the protestors as they were blocking the road leading to West Qurna the largest oil field in Iraq, this led to the death of one demonstrator and has further sparked oil companies to move their senior officials as chances of riots happening increase. Tribe people have taken over the road again and have called for an action against the police officer and his commander or they should be handed over to them, they have also further demanded that staff which are not born in that areas including Iraqis should be fired and 80% of the staff in these fields should be from Basra. All these activities have caused minor disturbances in the production facility.

Geopolitical angle

Since Saddam Hussein’s administration was toppled in 2003, Iran has had a significant role in Iraqi politics. Iran is connected to more than a dozen political parties in Iraq, and it supports and educates paramilitary organizations that support these parties. Ayatollah Ali Khamenei is the supreme leader of Iran, and certain paramilitary organizations operating under the Popular Mobilization Forces banner in Iraq have sworn allegiance to him. These groups have attempted to drive out the remaining American forces in Iraq by using violence (Robinson, 2022)to eliminate resistance to Iranian control. Iran’s engagement is motivated by two main aims. Preventing Baghdad’s administration from once again turning antagonistic toward Tehran is the first. The second objective of Iran is to expel American forces from Iraq and the wider area. Through these actions Iran is not only able to control the internal politics of Iraq it is also able to maintain its control over the country’s resources and policies. Furthermore, with a huge influence of Iran over the matters of the country Iraq’s relations with the west is also severing and this can be seen in the recent years.

Business Implications

With the ongoing protest and the history of the country there exists many problems for new businesses. With rampant corruption and militancy, the protest only further makes it difficult for new and existing businesses to function. Since the country on an average only gets 6 hours of electricity a day most businesses cannot function and either have to accept these consequences or have to look for private electricity generators which are run by influential businessmen and militants. This is leading to further funds for militancy who are disrupting the energy supply and making the business impossible.

With the death of a protestor and the involvement of tribes into the protest can also have implications for business as these tribesmen want that local should be absorbed in these companies and should get the benefits, with arms also involved in this many businesses feel that their interest can be harmed and therefore are evacuating their officials from the ground. With a chance of this protest in becoming into a standoff between the army and these tribes’ businesses have to make sure that their assets on the ground are better protected.


The whole situation in Iraq is more of a political problem, where people have had it with the government and the meddling of Iran in their political affairs. With the internal politics being split into Shia’s, Sunni’s and Kurds and the unfulfillment of the electoral promises, the rise of federalism and regional autonomy and the increase in the rate of unemployment is causing such incidents to happen. The government needs to find more avenues of employment which is only possible with more investment in the country. While firms from US, Japan and China are present in Iraq it needs to create an environment for more firms to enter their market, this is possible only once the political atmosphere is fixed. Also, the influence of Iran also has to be curbed down and the Kurdistan issue also needs to be solved so that the country can at last come to peace and focus on development.   

 Protests in Iraq could lead to a million barrels of Iraqi oil per day to not reach the market. The global energy market will be impacted as the protest continues. Even though the oil prices have not been impacted yet as protestors have not reached the production facilities still there lies an uncertainty in disruption which would not only impact the second largest supplier of oil amongst the OPEC countries i.e., Iraq but would also hurt the west especially after they have decided to boycott Russian oil and are looking for alternatives.

Naman Anand
Naman Anand
Naman is an alumnus of Motilal Nehru College, University of Delhi. He is currently pursuing his Masters in Diplomacy, Law and Business from O.P. Jindal Global University, Sonipat.